Bolstering use of heating oil against electricity

The government is eager to see households switch back from electricity to heating oil for this winter, and is actively promoting the fuel through a horizontal state subsidy per liter and the increase of the heating oil allowance with an extra bonus for those who make the switch. This is expected to render the use of heating oil considerably cheaper than that of electricity or natural gas this winter.

On Monday morning Finance Minister Christos Staikouras announced the details of the new package of measures that Prime Minister Kyriakos Mitsotakis spoke about in his address to the Thessaloniki International Fair, the minister explained that the government will offer a 0.25-euro subsidy per liter of heating oil to all consumers, on top of the heating allowance. This is increasing from an average of €300 to €350, but will double to €700 for consumers who switch from electricity to oil for their heating.

The criterion for the collection of the handout is also expanding to concern many more consumers. The income threshold for single people is increasing to €16,000 from the €14,000 euros that applied last winter and to €24,000 euros from 20,000 for couples, with an increase of €3,000 for each dependent child.

As he pointed out, the cost of the government intervention to deal with energy costs amounts to €13.2 billion in 2022, of which €10 billion concerns the cost of subsidizing electricity and natural gas for households and businesses. Some 80% of the total interventions are directed to the generous subsidy with €4.1 billion for households and the rest for businesses, he explained. A gas subsidy of €50/megawatt-hour would produce a bill of €1 billion, with about €320 million concerning households.

In his address on Monday Staikouras also revealed that the government has considerably raised its estimate about economic growth in 2022, speaking of 5.3% for this year against the previous estimate for 3.1%. He added that this means Greece’s gross domestic product this year is set to top €200 billion and come close to €205 billion.

Staikouras went on to predict a 2.1% expansion of the economy in 2023.